Regulation  

FCA to unleash avalanche of unauthorised firm warnings

The Financial Conduct Authority is set to issue a swathe of alerts on unauthorised firms offering services that could appear to the uninitiated to be regulated advice, having put up eight such warnings in just two weeks.

Having officially come into being on 1 April and with its first working week limited to four days by the Easter break, the FCA still managed to put four alerts on its website last week, with three relating to unauthorised firms offering advice-type services and one warning over a firm that appears to be a ‘clone’ of an FCA-regulated entity.

During the week before, the final week of the Financial Services Authority’s existence in the lead up to its bifurcation, a further four notices were put on its website. Two of these related to unauthorised firms offering services that may appear to be regulated advice and two were in relation to alleged clone firms.

Prior to the past two weeks, there had been just one alert in the first three months of 2013, at the beginning of February.

A source with knowledge of the regulator’s approach said there will be a large number of these alerts going up on the regulator’s website on a regular basis, as it seeks to take a more interventionist stance and draw the lines more clearly around authorised activities.

The FCA’s alerts on unauthorised firms do not say the companies are acting dishonestly, they simply flag up that they are not authorised under the Financial Services and Markets Act 2000 to carry out regulated activities.

According to the source, the warnings imply that this might not otherwise be clear to investors. The FCA said simply that it could not comment beyond what is included in the warnings.

The FCA’s unauthorised firm alerts last week comprised of warnings relating to Eco Asian Carbon Consulting and several related entities, Gilbert Webb Estates Ltd, and Green and Banks Advisors. The week before it had issued similar warnings over AG Group Advisers and Goldcrest International.

Its clone firm warnings over the past two weeks have been issued in relation to London wealth manager Blackbird Europe Ltd, Global Financial Services and AGF Europe Advisers.

Aside from this focus on unauthorised firms, the FSA told FTAdviser prior to its split that the FCA will seek to clamp down on advisers that continue to operate despite being de-authorised post-Retail Distribution Review.

It admitted publicly that there is “certainly the potential” that de-authorised advisers are operating in the market and called on regulated advisers to come forward and report any offenders.